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Who should be overseeing the overseas transfer?

Whetu used an electronic funds transfers service to send money to his relatives in China. Unfortunately, Whetu entered an incorrect digit in the bank account number and the money was transferred to a third-party bank account.

The third party withdrew the money in China and did not return to the bank. In an effort to assist Whetu with recovering his money, the electronic funds transfers service spoke to the receiving bank and placed a lien on the third party’s account.

Whetu was not happy with the outcome and felt that he was not given enough information about when his funds would be returned, so he complained to FSCL.



Whetu argued that the electronic funds transfer service should compensate him for transferring his money to the wrong account. Whetu relied on advice from the company’s staff member that they would not approve a transfer if the name and bank account number did not match.



Upon review, we found that although the electronic funds transfers service had provided Whetu with some inconsistent advice, this advice was provided after the fact. Whetu had not relied on the advice before transferring his money.

We also considered the electronic funds transfer service’s terms of use which clearly stated that “it is your responsibility to make sure your transaction details are accurate”.

However, we thought that the electronic funds transfers service could have managed Whetu’s expectations better and it had delayed in providing him with a complaints process.

We recommended to the electronic funds transfers service that they offer Whetu some compensation for the service issues.



The electronic funds transfers service agreed to compensate Whetu approximately half of the lost funds. It also agreed to continue attempting to recover Whetu’s lost funds from China.

Whetu accepted this in resolution of his complaint.


Insights for consumers

It is important for consumers to read the terms of use for a financial service, as the financial service provider will be entitled to rely on the terms of use as the basis of the contractual relationship.

Every financial service provider should have a policy for staff to properly recognise complaints and refer a client to their internal and external disputes resolution process.